China: Xuchang City: From Big Tobacco Grower to Kingdom of Tobacco Industry

Source from:  The Great River newspaper 10/10/2004

Xuchang City in central China's Henan Province, through years of development, has become a large manufacturing base of China's tobacco industry, known as a kingdom of the tobacco industry, from a big tobacco growing region decades ago. [img border=0 hspace="4" vspace="4" align="left" src=http://www.tobaccochina.com/english/picture/images.jpg] From the 1950s to the 1970s, Xuchang City used to grow some 100 million mu (66,667 hectares) of tobacco annually, accounting for 90 percent of the tobacco grown in Henan Province and one-third of the tobacco grown in the whole of China, with the annual yield of leaf tobacco topping 100 million kilograms. Leaf tobacco produced in Xuchang used to be an indispensable part of the raw material for making high-quality cigarettes of the famous Chunghwa and Panda brands. Over recent years, the system of road transportation has developed rapidly in China, giving a powerful impetus to the development of the business of tobacco growing and growth of the tobacco trade in other parts of China. Meanwhile, tobacco growers in Xuchang have shifted onto other lines of production than tobacco growing in business diversification. In particular, tobacco crops in Xuchang have been affected by tobacco viruses for successive years. As a result of these factors, tobacco growing in Xuchang has been on a steady decrease since 1988, to over 160,000 mu (10,667 hectares) in 2004. The annual yield of leaf tobacco is expected to drop to a record low of over 12 million kilograms in 2004. On the contrary, the businesses of tobacco manufacturing and tobacco machinery production in Xuchang have developed rapidly over recent years. As one of the four largest tobacco machinery manufacturers in China, Xuchang City Tobacco Machinery Plant annually generates 180 million yuan (21.68 million U.S. dollars) in industrial output value. It leads other Chinese tobacco machinery manufacturers in terms of production technology and equipment. Reputed as "the cradle of the business of tobacco leaf threshing and redrying," Xuchang City Tobacco Flue-Curing Factory is the oldest leaf tobacco threshing and redrying enterprise in China. In 2002 and 2003, Xuchang General Cigarette Factory was the biggest corporate taxpayer in Henan Province. In the first half of 2004, Xuchang General Cigarette Factory generated 1.71 billion yuan (206 million U.S. dollars) in sales income, including 117 million yuan (14 million U.S. dollars) in profits. It the first of the three tobacco manufacturers in Henan in terms of profit making and other major economic targets. In 2003, Xuchang City adopted a plan to build itself into a big base of the tobacco industry of China, integrating the businesses of tobacco growing, tobacco leaf threshing and redrying, tobacco machinery production and the production and supply of cigarette materials. In an interview with The Great River newspaper of Henan on September 22, Cheng Gong, director of the Leaf Tobacco Production Sector of Henan Provincial Tobacco Monopoly Administration, said that although the business of tobacco growing in Xuchang has declined seriously over recent years, the reputation of Xuchang City as a kingdom of the tobacco industry has never changed. Enditem